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Soaring Asian economies are driving growth in oil consumption today. In India alone, demand is expected to almost double to 10 million barrels per day by 2040.

It is for that reason – and a host of others – that the agreement on Monday between Adnoc and Saudi Aramco to jointly invest in a $44 billion refinery on India’s west coast is so shrewd. Combined, they will hold a 50 per cent stake in the site while an Indian-led consortium will hold the rest. The facility at Ratnagiri – which will refine up to 1.2 million barrels of crude oil daily and produce 18m tonnes of chemical products each year – will stand Abu Dhabi in excellent stead as it diversifies its oil and gas industry.

The joint agreement is wise for four key reasons. First, it secures a steady market for Abu Dhabi’s oil – and a thirsty one at that. India is the world’s third largest consumer of crude and plans to more than double its refinery capacity by 2040. Monday’s deal allows Adnoc and Aramco to corner a lucrative market of truly epic proportions.

Second, it reflects a measured approach based on diversification within the oil and gas sector. Many oil producers, from Nigeria to Venezuela, failed to grasp the need to invest downstream, comfortable simply to pump and sell crude oil. Their myopia bit in 2014 when sliding oil prices tanked their economies. The UAE, by contrast, recognised early the need to diversify. The Ratnagiri deal follows a multibillion dirham investment in the world’s largest refinery, in Ruwais, near Abu Dhabi. Crucially, the complex in Ratnagiri will host both refining and petrochemical facilities, allowing it to produce a wide range of products for booming local markets.

Third, their combined 50 per cent stake reflects growing economic co-operation between the UAE and Saudi Arabia, who have been eyeing joint investment opportunities for some time. It will catalyse future co-operation between the two, upon whom regional stability and prosperity increasingly depend.

Fourth, the deal has all the hallmarks of a lucrative long-term investment, combining as it does the oil supply, technology, resources and expertise of multiple international oil companies.

Ultimately, Ratnagiri refinery investment offers significant mutual benefit for all parties. It ensures a secure supply of crude oil for India and affords Adnoc and Aramco a crucial foothold for its products in a flourishing market.